Preservatives In Wine: A Discrete Choice Experiment

Milan Ščasný (), Lydia Chikumbi, Edwin Muchapondwa and Djiby Thiam
Additional contact information
Lydia Chikumbi: School of Economics, University of Cape Town, South Africa
Edwin Muchapondwa: School of Economics, University of Cape Town, South Africa
Djiby Thiam: School of Economics, University of Cape Town, South Africa

No 2020/23, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: Recently, the South African wine industry launched the world's first "no sulphite added" wine made from indigenous Rooibos & Honey bush toasted wood chips. This wood chip contains antioxidants properties known to protect the wine from oxidation. On the other hand, SO2, as a preservative, is often perceived by wine consumers as causing headaches and migraine. Differentiated wines based on their SO2 content may be a profitable marketing avenue for the struggling industry. We interviewed more than 600 wine consumers to investigate perceptions on wine preservatives and to elicit willingness to pay for the innovative alternative based on Rooibos & Honey bush wood chips. Alongside the wine preservatives, we also examine consumers´ preferences for organic wine attribute and wine quality measured by 100-points quality score, and the cost. Based on the results from the mixed logit model, we find that consumers are willing to pay additionally R56.48(€3.53)per bottle of wine with natural Rooibos & Honey bush wood chips, while they are ready to pay R19.52(€1.22) more for organic wine and R1.60(€0.10) for each point on quality score. Consumer preferences are not statistically different between red and white wine but differ considerably across consumers, in particular, those who believe SO2 in wine cause headaches are willing to pay for replacing sulphur-based preservatives by a natural one at least three times more. Marketing implications are offered for the wine industry. Despite being the best available, existing data is still imperfect, and we therefore call for better data in the form of MNCs´ unconsolidated, public country-by-country reporting data.

Keywords: wine preservatives; willingness to pay; discrete choice experiment (search for similar items in EconPapers)
JEL-codes: O31 P46 Q10 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2020-08, Revised 2020-08
New Economics Papers: this item is included in nep-dcm and nep-exp
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ies.fsv.cuni.cz/en/veda-vyzkum/working-papers/6269 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fau:wpaper:wp2020_23

Access Statistics for this paper

More papers in Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies Contact information at EDIRC.
Bibliographic data for series maintained by Natalie Svarcova ().